As
part of the loan application
process, virtually all
lenders will want to
see a copy of your credit
report. The report will
list all your long-term
debts (credit cards,
mortgage payments, automobile
and student loans, etc),
as well as your payment
history. If you don't
have a copy of your
credit report, most
lenders will generally
require you to pay for
a copy when they process
your loan application.
However,
most real estate experts
agree that it is a
good idea to obtain
a copy of your credit
report several months
before you apply for
a loan. This is so
you have a chance
to resolve any problems
with your credit before
your bank sees it.
U.S. Federal law ensures
that you have access
to your credit report,
which may be obtained
from your local credit
bureau or any of several
national firms that
specialize in credit
reports.
Late
payments
For most people, problems
with their credit
report are likely
related to late payments
on a debt. If you
were late one month
in paying off your
credit card, but otherwise
have a good payment
history, chances are
most lenders won't
be too concerned.
But if you have a
history of late payments
you'll need to document
the reasons why. A
slow payment history
won't necessarily
get you turned down
for a loan, but you
may have to pay a
higher rate of interest
or otherwise prove
to the lender that
you can repay your
loan in a timely fashion.
Errors
on your credit report
Many people are surprised
to learn that credit
reports can often
contains errors or
inaccurate information.
If this is the case
with your credit report,
you'll need to contact
the reporting agency
or creditor to have
the problem resolved.
This can sometimes
be a slow process,
so make sure to give
yourself time to clear
up the mistake.
Bankruptcies
and foreclosures
There's no getting
around it, a bankruptcy
on your credit report
is not a good thing.
But that doesn't mean
you still can't obtain
a loan. Even though
a bankruptcy may stay
on your credit report
for seven to ten years,
lenders will often
consider the circumstances
surrounding a bankruptcy
(family illness, injury,
etc.). Moreover, if
you have reestablished
good credit since
the bankruptcy, a
lender will be more
inclined to approve
your application.
